Concerns Rise Over Indian Fighter Negotiations

NEW DELHI — India’s Medium Multi-Role Combat Aircraft (MMRCA) contract with Dassault Aviation is not likely to be signed before April 2014, despite the Indian air force’s (IAF) concerns about maintaining its tactical air deterrent capability.

According to a defense ministry official, with national elections expected sometime in April, it is highly unlikely the multi-billion-dollar contract to buy 126 Rafale fighters will be concluded during India’s current fiscal year, which ends March 31. The program is India’s biggest-ever defense acquisition.

“Negotiations on the MMRCA are still on,” the official tells Aviation Week. “Several issues have been coming up during the contract negotiations with the French firm ... We are still talking. As stated earlier, this is a major deal and we cannot place a timeline on when the deal will be signed.

“We need to consider all issues before finalizing it,” the official continues. “If the deal is delayed until next year, the first aircraft will arrive only in 2017.”

Meanwhile, Indian air force chief Air Chief Marshal N.A.K. Browne has expressed concern over depleted tactical air capability and the delay in signing the MMRCA deal.

“The MMRCA and the first two squadrons of Tejas light combat aircraft are very critical for maintaining our deterrence capability,” he says. “Otherwise, our force-levels will go down rapidly.”

Despite the long delay in finalizing the MMRCA deal, he says, “There is no back-up plan. The MMRCA is the only option, and it is highly doable. We need to sign it by next year... We cannot delay it any further.”

The IAF chief also is concerned about continuing low force-levels. “We are authorized for 42 fighter squadrons but, at present, we are much below that.” Currently, the IAF has a mere 34 fighter squadrons.

The defense ministry official says the induction of Rafales from 2018 will help arrest the depletion of the IAF’s squadron strength, which will go up to 42 squadrons with the planned new inductions, including the Indo-Russian Fifth Generation Fighter Aircraft (FGFA) by 2025.

However, the long-term plan for co-developing the FGFA with Russia also has been delayed. It is expected to take at least another year to conclude the $11 billion full-design R&D contract for the futuristic fighter, Browne says.

For MMRCA, the defense ministry has been in contract negotiations with Dassault for about 20 months. The technical and commercial evaluation process began in August 2007, with the French Rafale fighter finally emerging as the winner in January 2012.

Under a proposed agreement, the Indian air force will get 18 Rafale aircraft from Dassault Aviation in fly-away condition; the rest would be manufactured by the state-run Hindustan Aeronautics Ltd. (HAL) under license from the French company.

According to sources close to the negotiations, the primary bone of contention is Dassault’s demand for two separate contracts: One for the 18 aircraft to be built in France and the other for the 108 aircraft, which are be integrated in India by HAL. The defense ministry has rejected this demand, and has conveyed that Dassault will be solely responsible for the entire lot of 126 aircraft, as per the original proposal.

Contract negotiations also have been delayed over issues arising out of the offset provisions, under which Dassault Aviation must reinvest 50% of the deal’s value in the Indian defense sector, through either direct purchases or providing technological know-how.